‘Green Economy’ Needs $1.3 Trillion
Investment Per Year, UN Says

Feb 06, 2011 - Alex Morales - bloomberg.com

Nations can kick-start a “green economy” by
redirecting $1.3 trillion a year from industries
that overuse resources to 10 areas ranging from
forestry to buildings, the United Nations Environment
Program said.

The expense -- about 2 percent of economic output
-- would help cut greenhouse gases and avoid price
shocks associated with a dependence on fossil fuels
and other commodities, UNEP said today in a report.

“Governments have a central role in changing
laws and policies, and in investing public money
in public wealth to make the transition possible,” said
Pavan Sukhdev, a Deutsche Bank AG banker temporarily
serving as head of UNEP’s green economy initiative. “By
doing so, they can also unleash the trillions of
dollars of private capital in favor of a green
economy.”

The study examined measures to make buildings
and vehicles more energy efficient, boost renewable
energy and promote more sustainable farming and
fishing. The new policies could be brought in without
diminishing growth prospects, while also reducing
greenhouse gas emissions to “safer” levels
and helping the UN towards development goals such
as halving the number of people without access
to safe drinking water, it said.

Countries are already spending billions of dollars
to reduce emissions and promote renewable energy.
Low-carbon energy investment surged to a record
$243 billion last year, Bloomberg New Energy Finance
said on Jan. 11.
$521 Billion

The International Energy Agency said last year
that global subsidies for clean and low-carbon
energy totaled $57 billion in 2009. HSBC Holdings
Plc in 2009 estimated that world governments had
allocated about $521 billion over five years in
so-called green stimulus spending as they tried
to promote more efficient industries in the wake
of the financial crisis.

The transition would lead to job losses in industries
such as fisheries, and investment will be needed
to re-train workers, according to the study. At
current levels of global domestic product, the
study recommended the following levels of spending:

-- Agriculture: $108 billion a year on measures
such as making the soil more fertile and cutting
wasted irrigation water.

-- Buildings: $134 billion for emissions-cutting
technologies such as insulation and double-glazing.

-- Energy Supply: Over $360 billion on renewables
and cutting emissions from existing power plants.